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A Public Utilities Commission of Ohio judge will hear arguments Sept. 14 from the city of Youngstown and the Office of the Ohio Consumers' Counsel urging the commission to revisit its decision to greatly raise steam heat rates for most of downtown Youngstown.
Jacky Werman St. John, a PUCO administrative law judge, on Thursday issued an order for the Sept. 14 hearing at the commission's office in Columbus. Her order came a day after the PUCO voted 5-0 to grant requests for a rehearing on its June 24 approval of emergency rate hikes to the 23 downtown customers that receive steam heat from SOBE Thermal Systems LLC, a financially-troubled utility company.
Without the significant rate increases, SOBE would have been out of money by September or October, according to John C. Collins, its receiver since Feb. 17.
For 13 of the SOBE's 23 customers, the emergency rate increase, effective June 30, is 93% with two at 92%, one at 91% and two at 36%. The five other customers are paying between 64% and 80% more.
That is for the non-heating season between May and October.
Between November and April, the rate will increase by another 162% for 14 of SOBE's 23 customers. One will pay 163% more during those six months with two paying 85% more. The six others will pay increases between 123% and 159%.
The city and OCC filed applications to the PUCO for a rehearing on July 24, 30 days after the commission's decision to approve SOBE's emergency rate increase at Collins' request.
A few hours after granting the requests for a rehearing on Wednesday, the PUCO issued an entry on its docket ordering Werman St. John to schedule a "hearing date and procedural schedule as expeditiously as possible."
Werman St. John's Thursday entry scheduled the evidentiary hearing for Sept. 14 and ordered that all expert testimony be filed by Sept. 8.
After the hearing, Werman St. John will draft an order to the PUCO as to whether to uphold, modify or reject the rate increases. It is up to the PUCO to act on her recommendation.
In the city's July 24 motion to appeal, Law Director Adam Buente argued the PUCO's order "is unreasonable and unlawful."
In the filing, Buente raised six arguments: the PUCO didn't make sufficient findings to justify the emergency rates, the city questions the PUCO's authority to replace existing contractual rates, the proportional-share allocation methodology lacks evidentiary support because some customers don't have functioning meters, the commission failed to consider the impact of the emergency rates on governmental customers, the commission should require additional accountability regarding expenditures of emergency revenue and the city asked the PUCO to clarify that the emergency rates are temporary.
John Finnigan, an OCC attorney, wrote in a July 24 motion to appeal: "The PUCO decided this case on a fast track, with no procedural schedule and no evidentiary hearing," and the OCC wants to "intervene in this case to give a voice to the residential consumers adversely affected by the PUCO's finding and order."
The OCC, the statewide legal representative for Ohio's residential consumers in matters related to utilities, contends the PUCO erred by failing to require an application for permanent rates and for failing to set an end date for the emergency rates, and that the PUCO should have required language that the increases were subject to refund.
The PUCO case entry on Wednesday states Ohio law "does not include a requirement to hold a hearing before approving emergency rates. Due to the exigent circumstances in this case, it was not possible to hold a hearing prior to authorizing the emergency rates. The genuine emergency circumstances presented by SOBE's financial distress and service issues required that emergency rates be imposed to prevent injury to the public's safety and welfare. There was insufficient time to hold even a limited hearing on an expedited schedule due to the monthly expenditures that significantly outpaced revenues."
The case entry adds that the PUCO "finds that a hearing should be held to allow the parties to present additional evidence and to allow the commission to further review the revenue requirement and rate design for the emergency rates on a forward basis. At the hearing, intervenors will have the opportunity to present alternatives to the emergency rate increase. Meanwhile, the emergency rates will remain in effect as the approved filed rates."
Mayor Derrick McDowell is continuing discussions with Gov. Mike DeWine and his office on possible options to save the troubled company with state funding. The city also paid for a study for up to $130,000 to offer long-term solutions for SOBE. The study should be done in September or October.
Andy Resnick, the city's spokesman, said after Wednesday's PUCO decision that "the city is in active conversations with the state and finalizing a plan to stabilize the current system."
Before the PUCO granted the emergency rate increase, Collins reported SOBE had about $130,000 in monthly revenue and about $220,000 in monthly expenses, and would be out of money by September or October.
David Ferro, SOBE's CEO, walked away from the Youngstown facility in September 2025 with it on the verge of insolvency and not paying several of its bills for months. A rented boiler that SOBE was using to provide steam heat to its downtown customers was repossessed Sept. 30 after SOBE failed to pay fees for several months.
Reg Martin was appointed receiver on Sept. 26 and eventually rented three boilers, though they failed at times in January and February, during the coldest periods of the year, including for days when the temperature was below zero.
Collins replaced Martin on Feb. 17 after numerous SOBE customers complained about the latter.
To save money, Collins returned two of the three rented boilers, cutting that monthly expense from $58,200 to about $28,000. In October, Collins will rent one larger capacity boiler to go along with the one that is currently at SOBE, 205 North Ave.